As the global digital camera market continues to boom, Japanese digital camera makers Sanyo and Sony are setting up production facilities overseas to drive down cost and secure a larger foothold. By expanding capacity and building up more cost-effective systems, these two players especially aim to accommodate the heating-up in the Western market.

 

Sanyo is currently building a new plant in southern Vietnam as part of its expansion strategy. Slated to come on line in May 2005, the Vietnamese factory is expected to manufacture 1.2 million units in the first fiscal year. The new site will cover approximately 20,000 square meters and employ around 500. In addition, Sanyo has raised capacity in its Indonesian and Chinese facilities to 8 million and 7 million units respectively. However, Sanyo will carry out future capacity expansion at the new Vietnamese site to minimize production risks. Due to cost concerns, value-line models for the US and European market will be produced here, while high-end models will be produced back in Japan or Korea.

 

Sony's new plant in China started to operate in July 2004 and is equipped with an annual capacity of 1.5 million units. Instead of catering to domestic sales as previously planned, production from this factory will be primarily shipped to the US and European markets to fill the rising demand.